FAC Explorer

Finding 529874 (2024-001)

Significant Deficiency Repeat Finding
Requirement
ABGHIL
Questioned Costs
-
Year
2024
Accepted
2025-03-25
Audit: 347911
Organization: Fayette County (IA)
Auditor: Hacker Nelson & CO PC

AI Summary

  • Core Issue: The County lacks adequate segregation of duties, increasing risks for cash safeguarding and financial statement accuracy.
  • Impacted Requirements: Management must ensure internal controls are in place, separating duties to prevent errors and fraud.
  • Recommended Follow-Up: Review and improve operating procedures to enhance internal controls, even with limited staff resources.

Finding Text

Condition: The County’s offices are not large enough to permit an adequate segregation of duties for effective internal controls. Management has not separated incompatible activities of personnel, thereby creating risks related to the safeguarding of cash and the accuracy of the financial statements. Criteria: Management is responsible for establishing and maintaining internal control. A good system of internal control provides for adequate segregation of duties so no one individual handles a transaction from its inception to completion. In order to maintain proper internal control, duties should be segregated so the authorization, custody and recording of transactions are not under the control of the same employee. This segregation of duties helps prevent losses from employee error or dishonesty and maximizes the accuracy of the County’s financial statements. Cause: The concentration of closely related duties and responsibilities such as the recording and processing of cash receipts, preparing grant expenditure reports, preparing financial information for posting and analyzing financial information by a small staff makes it impossible to establish an adequate system of automatic internal checks on the accuracy and reliability of the accounting records. Effect: This deficiency results in a reasonable possibility that the County would not be able to detect misstatements that would be material in relation to the financial statements and/or federal award programs in a timely period by employees in the normal course of performing their assigned functions. Recommendation: The County should review the operating procedures of the County offices to obtain the maximum internal control possible under the circumstances utilizing currently available staff, including elected officials. While we do recognize that the County is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Board be aware that this condition does exist. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management is cognizant of this limitation and will implement additional procedures where possible.

Corrective Action Plan

CORRECTIVE ACTION PLAN March 6, 2025 To: U.S. Department of Treasury Fayette County respectfully submits the following corrective action plan for the year ended June 30, 2024. Name and address of independent public accounting firm: Hacker, Nelson & Co., CPAs 123 W. Water Street Decorah, IA 52101 Audit period: Year ended June 30, 2024. The finding from the June 30, 2024 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDING - FEDERAL AWARDS PROGRAM AUDIT U.S. Department of Treasury: Federal Assistance Listing Number 21.027: Coronavirus State and Local Fiscal Recovery Funds Internal control deficiency: See Finding 2024-001 Recommendation: The County should review the operating procedures of the County offices to obtain the maximum internal control possible under the circumstances utilizing currently available staff, including elected officials. While we do recognize that the County is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Board be aware that this condition does exist. Action Taken: Management is cognizant of this limitation and will implement additional procedures where possible. Anticipated Date of Completion: June 30, 2025. Page 2 If the U.S. Department of Treasury has questions regarding this plan, please call Lori Moellers, County Auditor, at 563- 422-3497. Sincerely yours, on Moellers, County Auditor Fayette County cc: Christi L. Meyer, CPA L Hir4&, 4# o4 FAYETTE COUNTY 114 N '.'LE ST1tEET 'I 0 lION 210 WEST UNION l? 2I76 T.40,hon, 610 454 2197 F 2O3 4224201 CORRECTIVE ACTION PLAN March 6, 2025 To: U.S. Department of Transportation Fayette County respectfully submits the following corrective action plan for the year ended June 30, 2024. Name and address of independent public accounting firm: Hacker, Nelson & Co., CPAs 123 W. Water Street Decorah, IA 52101 Audit period: 'Year ended June 30, 2024. The finding from the June 30, 2024 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDING - FEDERAL AWARDS PROGRAM AUDIT U.S. Department of Transportation: Federal Assistance Listing Number 20.205: Highway Planning and Construction Internal control deficiency: See Finding 2024-001 Recommendation: The County should review the operating procedures of the County offices to obtain the maximum internal control possible under the circumstances utilizing currently available staff, including elected officials. While we do recognize that the County is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Board be aware that this condition does exist. Action Taken: Management is cognizant of this limitation and will implement additional procedures where possible. Anticipated Date of Completion: June 30, 2025. Page 2 If the U.S. Department of Transportation has questions regarding this plan, please call Lori Moellers, County Auditor, at 563-422-3497. Sincerely yours,

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 529875 2024-001
    Significant Deficiency Repeat
  • 1106316 2024-001
    Significant Deficiency Repeat
  • 1106317 2024-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $848,403
20.205 Highway Planning and Construction $762,117
16.738 Edward Byrne Memorial Justice Assistance Grant Program $36,340
93.069 Public Health Emergency Preparedness $30,634
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $28,312
97.042 Emergency Management Performance Grants $24,945
93.778 Medical Assistance Program $24,113
16.575 Crime Victim Assistance $22,535
93.268 Immunization Cooperative Agreements $16,375
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $15,522
20.616 National Priority Safety Programs $7,317
20.600 State and Community Highway Safety $5,480
93.667 Social Services Block Grant $4,227
93.658 Foster Care Title IV-E $2,971
93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund $2,719
93.659 Adoption Assistance $2,063
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $1,525
93.472 Title IV-E Prevention Program $546
93.767 Children's Health Insurance Program $470
93.566 Refugee and Entrant Assistance State/replacement Designee Administered Programs $97
93.090 Guardianship Assistance $4